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1 1 (April 14, 2021)

handle is hein.crs/goveczt0001 and id is 1 raw text is: Congressional *.Research Service informing the I gislative debate since 1914___________________ U.S. Challenges to China's Farm Policies Updated April 14, 2021 In 2019, the World Trade Organization (WTO) ruled in favor of the United States in two cases that the U.S. Office of the Trade Representative (USTR) filed against China, alleging that China's agricultural policies were inconsistent with its WTO obligations. While China agreed to conform to the WTO rulings, USTR contends that Beijing failed to act on one of the cases by the agreed-upon deadline of June 30, 2020, and requested the WTO authorization to take countermeasures against imports from China. China's Farm Support Spending In the first case (DS511), USTR contended that China's support policies to growers of wheat, rice, and corn exceeded the spending limits it agreed to in 2001, when it joined the WTO, by nearly $100 billion from 2012 through 2015. USTR asserted that these policies created an incentive for Chinese farmers to increase production of the subsidized crops, displacing imports and distorting international trade. On February 28, 2019, the WTO dispute settlement body agreed with major parts of the U.S. complaint, finding that China had exceeded its domestic support limits for wheat and rice in each year between 2012 and 2015. The WTO body also disagreed with China's methodology for calculating the amount of domestic support its wheat and rice farmers received. It recommended changes to bring the Chinese policies into compliance with China's WTO commitments. It did not make a ruling on corn because, following the 2015 harvest, China made changes to its calculations of corn support prices, making them less market distorting. China did not appeal the ruling but committed to abide by it. China restated that commitment in its Phase One trade agreement with the United States in January 2020. On June 18, 2020, China notified the WTO that China had implemented changes to its rice and wheat policies to comply with the WTO recommendations. China adopted an approach that the dispute settlement body had indicated as potentially legal under the WTO's Agreement on Agriculture. China is to cap the annual quantity of wheat and rice eligible to receive government support at a level substantially less than total national production. Each year, in advance of planting, China is to announce both the support prices and the maximum production amounts eligible for government procurement at those prices. Any quantities produced beyond the announced level would not be eligible for government support and would therefore not count against spending limits. In 2016 China reported that it had purchased 28.5 million metric tons (MMT) of wheat, representing 6.6% of the total value of national wheat production. Under the prior system, the dispute settlement body found Congressional Research Service https://crsreports.congress.gov IN11469 CRS INSIGHT Prepared for Members and Committees of Congress

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